City of Stockton, CA on the Brink of Bankruptcy
While other cities have gone into bankruptcy, Stockton may be the largest to date. It has been a something that has been a growing concern; the city budget is far from being balanced. Many factors have pushed the city into this situation: drop in home values, unemployment, and a multi-year labor contract have all played a part in the city’s troubles.
The drop in home values decreased taxes and fees to the city. Stockton’s unemployment rate is the second worst in the nation and is struggling to make improvements. The labor contract that was recently negotiated is putting a burden in the current economy; there just aren’t funds for the labor agreement.
A few years ago, Vallejo filed for bankruptcy. Vallejo has since made many positive changes and is looking to get out of the bankruptcy courts. So maybe there is hope for Stockton. Sure things will be bad for a while; bonds will be expensive, major cuts will be made, and creditors will take a big hit. City Council will be making some important choices in the next few days, they will be well informed and make the best options for the city of Stockton.
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